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Paradigm Midstream CEO on Bakken project: This is a game changer

By Paradigm Midstream LLC | May 22, 2013

Paradigm Midstream, a Dallas-based company, has announced the planned construction of a new 12-inch multi-market pipeline in the heart of the Bakken Shale.  Permitting is underway and construction is scheduled to begin in late 2013, with the pipeline expected to come on line in 2014, adding up to 120,000 barrels per day of crude oil take-away capacity from McKenzie County, N.D.

Paradigm Midstream and Dakota Plains Holdings Inc. and joint-venture partner, Petroleum Transport Solutions LLC, an indirect wholly owned subsidiary of World Fuel Services Corp., have entered into an agreement that could lead to an exclusive pipeline transportation agreement to export crude oil from the N.D. counties of McKenzie and Dunn. The route for the initial pipeline will run from Johnson's Corner, located in McKenzie County, and tie into the Pioneer crude oil transloading facility owned by Dakota Plains and its partner located in south Mountrail County in New Town, N.D. The pipeline will then run from the Pioneer facility to Enbridge's Stanley Station located in north Mountrail County, where commercial agreements are being finalized to tie into Enbridge's N.D. pipeline system at Stanley, which connects to Enbridge's Berthold Rail facility and additional pipeline capacity downstream of Berthold, N.D.

"Logistical constraints and capacity issues associated with transporting crude and NGLs have long been a detriment to pricing for producers throughout the region," said Brian Manion , Paradigm Midstream founder.  "The Paradigm Midstream pipeline connects the two most prolific areas of the Bakken and offers the most optionality of any outbound infrastructure to date. This pipeline will open up premium crude markets to producers with limited optionality south of the Missouri River. In addition to the traditional options located at Johnson's Corner, producers will also have access to dedicated outbound markets, including two Class 1 Rail systems and Enbridge Pipeline at Stanley and Berthold. With flexible multiple market access, this is a game changer for producers throughout the Bakken Shale region."

The proposed pipeline offers producers flow assurance from McKenzie County and flexible premium market access through connections to the Canadian Pacific Line (Class 1 Rail) at the Pioneer facility and the Burlington Northern Santa Fe's Line (Class 1 Rail) at the Enbridge Berthold Rail facility, and to pipeline markets connected to the Enbridge pipeline system across the U.S. The proposed pipeline uniquely provides producers with access to East Coast, West Coast and Gulf Coast rail markets, as well as multiple pipeline and refinery markets at Clearbrook, Minn.,  the Upper Great Lakes, Cushing, Okal., and the Midwest and the Gulf Coast. In addition, Paradigm Midstream and Dakota Plains are pursuing a new state-of-the-art NGL transloading solution at the Pioneer facility.

Stonepeak Infrastructure Partners, an independent investment firm specializing in North American infrastructure projects, has partnered with Paradigm Midstream to provide expertise, resources and capital for the pipeline and associated Bakken projects.

Craig McKenzie , chairman and CEO of Dakota Plains said, "The Paradigm Midstream line supplying our Pioneer facility in New Town will provide the McKenzie County oil producer multiple transportation and market options. With Pioneer construction underway, we are expanding and transforming our New Town facility into an energy hub for the Bakken. The expansion includes two loop tracks each with the capacity to handle 120-car unit trains dedicated to crude oil, 180,000 barrels of crude oil storage, and will also potentially utilize existing rail infrastructure for the NGL's out-bound and in-bound commodities like sand, pipe and diesel. We are very excited to pursue this opportunity with Paradigm and see exceptional value in their gathering systems as we strive to maximize the utilization of our 192-acre terminal in New Town."